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Learning, Sharing, and Teaching => Taxes => Topic started by: dalekeener on July 10, 2015, 01:55:20 PM

Title: Investments Outside a Tax Deferred Account
Post by: dalekeener on July 10, 2015, 01:55:20 PM

In general is it better to put most income producing investments in my tax advantage account and growth funds etc in my taxable account. Trying to think of both accounts as one portfolio...

Title: Re: Investments Outside a Tax Deferred Account
Post by: forummm on July 10, 2015, 02:15:31 PM

Generally you want to earn your dividends (say from a bond fund) in tax-advantaged accounts. If you are a US investor and have foreign stock funds, you might want those in taxable accounts because of the foreign tax credit.

Title: Re: Investments Outside a Tax Deferred Account
Post by: NorCal on July 10, 2015, 02:28:06 PM

As a general rule, domestic stocks (particularly those that pay lower dividends) and tax exempt bonds should be in your taxable account, where international stocks, taxable bonds, and REITs should be in tax deferred accounts.

The Bogleheads guide to retirement planning has a full prioritization list that's good to look at.

However, there are exceptions.

If you have a lower risk tolerance in your taxable portfolio than your tax deferred portfolio, you should still diversify with bonds.  I personally do this, as my taxable portfolio may turn into a house down payment in ~5 years.

Title: Re: Investments Outside a Tax Deferred Account
Post by: Frankies Girl on July 10, 2015, 02:53:53 PM

http://www.bogleheads.org/wiki/Principles_of_tax-efficient_fund_placement

Title: Re: Investments Outside a Tax Deferred Account
Post by: BBub on July 16, 2015, 07:11:25 AM

Wow, great resource.  Thanks for sharing Frankies Girl.